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February 2018

Destination Golf

A Nebraska-based group calling itself the Dormie Network is growing a countrywide network of destination private clubs on an ironically overlooked part of the experience–the game of golf itself

Once the concerning numbers around golf participation began to surface, many panicked operators scrambled to make their product attractive to as many non-traditional demographics as possible.

Forgotten in all the relaxed blue jean policies and pickleball courts was the one core demographic that never turned its back on private clubs; the affluent, well traveled, corporately-connected golf purist. Now, Zach Peed has an ambitious plan to serve them.

The Nebraska-based, former collegiate golfer has been steadily assembling a stable of ultra-high end properties across the country. The organization, currently using the working name “Dormie Network”, boasts Ballyhack Golf Club in Virginia, ArborLinks in Nebraska, Briggs Ranch outside San Antonio and, most recently, Dormie Club in North Carolina.

The end goal is to create a network of 20 to 25 destination private clubs focused purely on the game and aimed squarely at these golf traditionalists. It’s a simple idea, and that’s precisely the reason Peed thinks it will work. “There are no gimmicks, it’s a pure product done best.”

Mark Ruhga is an operations manager at Landscapes Unlimited, the company tasked with managing the burgeoning group of courses for Peed. He says the timing is perfect for an endeavor like this. “There are many courses that opened just before the issues in 2008 that started out on the wrong foot and never fully recovered,” he says. “A lot of people trying to get out.”

The Dormie Club in Pinehurst, North Carolina, is perhaps the best example of this. The facility, which opened in 2010, was originally conceived as a members-only club. Even with a No. 3 ranking on GolfWeek’s Best New Courses list, Dormie Club ran into trouble immediately. “They tried to make a go as semi-private, but it just never worked,” says Ruhga.

Reports suggest the original owners paid north of $15 million for the 1,000-acre parcel of land, and close to $10 million on the course. Peed was able to secure both for $7 million. Ruhga says numbers like this allow Peed to breathe new lifeblood into these distressed properties. “It’s really an opportunity to create the magic that was originally intended.”

One of the first investments stakeholders at the Dormie Network make when they acquire a new property is in course conditioning. “Our first priority is ensuring that the golf product is up to the standards we set as an organization.”

Staff will conduct a full agronomic assessment to see where improvements are needed. “One consistent thing we’ve found in the properties we’ve acquired is that the maintenance fleet has been somewhat deferred,” Ruhga explains.

Next up is the construction of on-site lodging, an essential component if the network is going to attract these ‘national’ members. “We’re looking at four-plexes, cottages, casitas, whatever type makes sense for the particular region the club is in.”

Then, the non-golf infrastructure is considered, from clubhouse expansions to new maintenance facilities and cart storage.

It’s a substantial investment, and one existing members are universally happy to hear. Each club acquired by the Dormie Network offers local memberships that are capped at 100 per property. All four clubs in the network are already at or near this number, and those members see Peed as an angel investor of sorts. “They kind of got used to a lot of false promises, and Zach comes in and sort of disproves that myth pretty quickly with his willingness to invest.”

While these local memberships provide a stable financial foundation, the real focus will be on national members across the entire network. “We’re in a growth mode right now, so our pricing is very aggressive,” explains Ruhga. Initiation fees have been dramatically reduced, and pricing set at surprisingly affordable levels. It’s all in an effort to layer in a group of early adopters who can then become advocates for the network. The potential market for memberships of this type is quite niche, and intertwined. Securing just a few can lead to numerous referrals quite quickly. “Getting these golf purists onto the course at any of our properties will be the best sales tool we have,” Ruhga notes.

Dormie Network is also tapping into the burgeoning arena of social media influencers. “We’ve hosted quite a few social media advocates to give them a taste of what we’re offering,” says Ruhga. The idea then is to have these super-connected influencers share their experience with their network of followers, who will then repost or retweet the story and so on, amplifying the message exponentially.

The organization is very active in acquiring new properties, and the industry is starting to notice. “Brokers are calling us with much more frequency now,” Ruhga adds. There are a few criteria the organization uses to filter opportunities. “Obviously, the quality of the golf course is first and foremost, but we also prefer clubs that are close to, but not in larger metro areas.” The ethos of the network also means there’s no need for traditional country club amenities. “Zach (Peed) isn’t concerned with tennis courts or pools.”

The final decision is not made until Peed is able to pay a visit the property and play the golf course. “If it speaks to him, he’ll make the move,” Ruhga explains.

Ruhga says several courses are currently being assessed, and he see’s no reason for the organization to slow down. “The people we are targeting use golf for pleasure and for business, and I think we’re providing the perfect venues for both.”